What would happen if min wage was $10?

[Rebiu]

What would happen if minimum wage was $10 here in the United States?

 

Ten dollars is not very much and I think it would relieve the strain on the various welfare programs that have to subsidise low wage jobs. Some say minimum wage allows more jobs for kids, but personaly I do not want my kid to thing their time is worth less than $10/hour.

 

What are your thoughts?

[Bluenoise]

Sure you can discuss it but the US is far to conservative for it to ever happen.

[Douglas]

What would happen if minimum wage was $10 here in the United States?

 

Ten dollars is not very much and I think it would relieve the strain on the various welfare programs that have to subsidise low wage jobs. Some say minimum wage allows more jobs for kids' date=' but[b'] personaly I do not want my kid to thing their time is worth less than $10/hour. [/b]

 

What are your thoughts?

Oh, I hope your kid fares well in society. My attitude to my kid(s), was quite the opposite.

[Illuminati]

Well, in all likely-hood, everything would go up in price to compensate.

[ecoli]

Widespread inflation.

[doG]

What would happen if minimum wage was $10 here in the United States?

The price of a Big Mac would jump to $5. It would also increase unemployment.

 

Short economic lesson: To make profit a company must pass on ALL of it's costs to it's customers. Their profit is that amount above those costs in the price. By raising a company's cost it must find a way to integrate that into the business that still results in profit. Without profit there's no point to being in business.

 

Forcing businesses to increase their labor cost will result in two major adjustments. To keep costs down in order to reduce the need to increase prices, businesses will let people go and try to get by with a smaller work force, thus increased unemployment. Once they have reduced their cost as much as possible by this means they will increase their prices as needed to achieve their profit margin ratio. That ratio is their goal and they will do what they need to achieve it.

 

Minimum wages fix nothing in the economy and should be eliminated. If you have a hard time seeing that with small increases try imagining what happens if you raise it to $100 and put yourself in a fast food manager's position. It shouldn't take you long to figure out what you must do if you want to stay in business to make money.

[1veedo]

Kerry was going to increase it to 7 (or 7.50). If min wage went up so would most other wages.

 

Why would inflation go up, though? The point of increasing minimum wage was so "teens" would be able to purchase more items sense they're "big buyers" or something.

 

edit: heh, whatever. I see that, doG, this was just what Kerry was thinking.

[Phi for All]

Raising the minimum wage does nothing to teach kids what their time is worth. If you want to teach them what their time is worth, teach them to work harder and smarter. They are at the beginning of their work lives. Set the bar too high and they'll expect higher wages to be handed to them.

 

If they want a job where they can get by with a minimum amount of work, the minimum wage is fine for them. If they want more they should believe their time is worth more and work to get it. Arbitrarily saying their time is worth more helps no one, employer or employee. Everyone thinks their time is worth more than they make, but few are willing to put in the smarts and the effort to make it so.

[ecoli]

Raising the minimum wage does nothing to teach kids what their time is worth. If you want to teach them what their time is worth' date=' teach them to work harder and smarter. They are at the beginning of their work lives. Set the bar too high and they'll expect higher wages to be handed to them.

 

If they want a job where they can get by with a minimum amount of work, the minimum wage is fine for them. If they want more they should believe their time is worth more and work to get it. Arbitrarily saying their time is worth more helps no one, employer or employee. Everyone thinks their time is worth more than they make, but few are willing to put in the smarts and the effort to make it so.[/quote']

 

You make an excellent point. I once applied for a job at a lab, and the boss offered my $7.50 an hour. He asked if I thought that was a fair wage, and I essentially told him that I didn't think my time was worth any more then that (if even that much). I got the job and a 50 cent pay raise per hour off the bat.

[Phi for All]

You make an excellent point. I once applied for a job at a lab, and the boss offered my $7.50 an hour. He asked if I thought that was a fair wage, and I essentially told him that I didn't think my time was worth any more then that (if even that much). I got the job and a 50 cent pay raise per hour off the bat.

Great story! I'll bet your boss loved your approach. I'll also bet you earned every dime you made.

 

In my old neighborhood, two kids came to my door asking to cut my lawn. They wanted $20. I said, "You're crazy, I can mow it myself in less than an hour. With the two of you it'll take even less time. I'm not paying $20 an hour for lawnmowing!"

 

Then I told them I'd make them a deal. I offered to call the two neighbors north of me and the two neighbors south of me and get them to let these kids mow their lawns for $10 each. "You can mow five lawns all in a row and make $50," I told them. I explained that they might even get our business weekly because all five houses would get mowed together and look mighty nice instead of being cut individually at different times. They could make $200 a month during the summer if they did a good job!

 

They turned me down. It turns out they only wanted $20 to buy something at the mall their parents wouldn't buy for them and they really didn't want to work all summer.

[cosine]

Sorry, but I don't know if you all really think that the only people who are paid minimum wage are kids. Unfortunantely they are not.

[Phi for All]

Sorry, but I don't know if you all really think that the only people who are paid minimum wage are kids. Unfortunantely they are not.

I think it was made very clear in the last few posts that we were indeed talking about minimum wage for kids.

 

And for the others working for minimum wage, posts 4-6 still hold true. What good does it do to raise the wage when costs will go up to compensate?

[Rebiu]

Oh, I hope your kid fares well in society. My attitude to my kid(s), was quite the opposite.

You want your kid to think his time is worth less than $10/hour? I hope your kid fares well in life.

[Rebiu]

Well, in all likely-hood, everything would go up in price to compensate.

I do not think the under $10/hour part of the economy is large enough to make much of a difference.

[cosine]

I think it was made very clear in the last few posts that we were indeed talking about minimum wage for kids.

 

And for the others working for minimum wage' date=' posts 4-6 still hold true. What good does it do to raise the wage when costs will go up to compensate?[/quote']

Well there has to be a minimum wage somewhere, because there is a poverty line that needs to be breached. If a business can't afford to keep their workers over the poverty line, then they can't afford workers. They made a bad choice trying to over extend their business. Having 1 job where someone can get by is better than having 2 jobs where nobody can get by. And the current minimum wage isn't anywhere near reaching the poverty line.

[Rebiu]

The price of a Big Mac would jump to $5. It would also increase unemployment.

Perhaps. Would $5 big macs really make much of a difference though.

 

Short economic lesson: To make profit a company must pass on ALL of it's costs to it's customers. Their profit is that amount above those costs in the price. By raising a company's cost it must find a way to integrate that into the business that still results in profit. Without profit there's no point to being in business.

 

Forcing businesses to increase their labor cost will result in two major adjustments. To keep costs down in order to reduce the need to increase prices' date=' businesses will let people go and try to get by with a smaller work force, thus increased unemployment. Once they have reduced their cost as much as possible by this means they will increase their prices as needed to achieve their profit margin ratio. That ratio is their goal and they will do what they need to achieve it.[/quote']First I think you overestimate the amount of the economy that is tied up in the sub $10 wage range. Second the labor market already causes this phenom and it makes companies more efficient. Third higher cost of labor causes capital investment that becomes cheaper as more similar companies invest in the same way and economies of scale make said investments cheaper? Forth sub $10 jobs are subsidized with tax credits, free health care, welfare, WIC and many more government programs.

Fifth many in the people with these jobs are trying to pay for education or other investments in themselves to get a better job.

 

Minimum wages fix nothing in the economy and should be eliminated. If you have a hard time seeing that with small increases try imagining what happens if you raise it to $100 and put yourself in a fast food manager's position.

Why are you so concerned about the fast food industry? I hardly think making a fast food managers job easier is an argument for not raising the minimum wage.

It shouldn't take you long to figure out what you must do if you want to stay in business to make money.

What? Hire illegals and pay them a subminimum wage.

 

The middle class is what fuels the American economy. Increasing the minimum wage give people more opportunities for education, makes families more stable, reduces crime and if good for the economy. Personally I find the argument that fast food is more important than a living wage a bit disgusting

.

[Rebiu]

Kerry was going to increase it to 7 (or 7.50). If min wage went up so would most other wages.

 

Why would inflation go up' date=' though? The point of increasing minimum wage was so "teens" would be able to purchase more items sense they're "big buyers" or something.

 

edit: heh, whatever. I see that, doG, this was just what Kerry was thinking.[/quote']When the fed lowers the prime rate of inflation and the government spending is out of control then inflation goes up. Once again there is not enough of the economy tied up in the $10 economy to cause much trouble.

[jdurg]

If the minimum wage is increased, then companies that do not wish to pay the minimum wage will move their workforce overseas. Hell, right now companies that don't even pay any minimum wage positions are moving their workforces overseas where they don't have to pay anything remotely close to a fair wage. As a result, the number of jobs available here in the US will drop off and unemployment will go upwards. This will be just as much of a problem as the poverty level is right now. If minimum wage is moved upwards, then any goods and services which rely on minimum wage positions will move up in price also. Groceries will cost more, food will cost more, commerce will cost more. As this cost goes up, then the raises in minimum wage that were given will still not be enough to cover the rising cost of goods and services.

 

It's a difficult thing to balance. Do you want 15% of your population below the poverty line and another 5% unemployed, or do you want 10% below the poverty line but another 10% unemployed?

[Phi for All]

Well there has to be a minimum wage somewhere, because there is a poverty line that needs to be breached.

We've come a long way in the US since minimum wage was adopted, and with news coverage being instantaneous, if minimum wage was done away with how long do you think a tuna canning factory could get away with paying children $2/hour? Minimum wage is no way to breach the poverty line since it drives prices up enough to make any raise in minimum wage pointless.

If a business can't afford to keep their workers over the poverty line, then they can't afford workers. They made a bad choice trying to over extend their business.

This is not true because the business owners have complied with the law and it's not their fault that employees who took the jobs they were offered don't have a better standard of living. The business owners will pay the lowest amount the employees and the market will let them get away with.

Having 1 job where someone can get by is better than having 2 jobs where nobody can get by. And the current minimum wage isn't anywhere near reaching the poverty line.

The market always figures a way around obstacles when costs get too high. If a job pays so little or is too hard that no one will do it, something will change or the business will die.

 

Minimum wage puts all the pressure on the business owners and none on the employee to get a better job. Education and training are better options but you can't expect the business owner paying minimum wage to foot the bill since he's the one losing his labor base. I wish public schools had a course for getting above minimum wage jobs and made it mandatory.

 

Poverty is a tough problem because there is no single cure since there is no single reason for it. Most federal subsidies are forced to look at a "poverty line" that offers a single welfare solution to a variety of different circumstances.

[cosine]

If the minimum wage is increased' date=' then companies that do not wish to pay the minimum wage will move their workforce overseas. Hell, right now companies that don't even pay any minimum wage positions are moving their workforces overseas where they don't have to pay anything remotely close to a fair wage. As a result, the number of jobs available here in the US will drop off and unemployment will go upwards. This will be just as much of a problem as the poverty level is right now. If minimum wage is moved upwards, then any goods and services which rely on minimum wage positions will move up in price also. Groceries will cost more, food will cost more, commerce will cost more. As this cost goes up, then the raises in minimum wage that were given will still not be enough to cover the rising cost of goods and services.

 

It's a difficult thing to balance. Do you want 15% of your population below the poverty line and another 5% unemployed, or do you want 10% below the poverty line but another 10% unemployed?[/quote']

Its ridiculous that our government allows companies to do that. Free trade is going bonkers. We need tariffs and taxes on companies that do that stuff. With all that tax money we could start our own, decently paying jobs.

[cosine]

This is not true because the business owners have complied with the law and it's not their fault that employees who took the jobs they were offered don't have a better standard of living. The business owners will pay the lowest amount the employees and the market will let them get away with.

 

We forgot to make slavery illegal, and people went and traded slaves shamelessly.

 

 

The market always figures a way around obstacles when costs get too high. If a job pays so little or is too hard that no one will do it' date=' something will change or the business will die.

[/quote']

 

How can you affirm this at all? We talk about this mysterious hand of the market like it actually exists. It obviously doesn't considering the current situation we're in. Although, maybe this "hand of the market" works in "mysterious ways" that us as mortals would not understand.

 

Edit reason: trying to sound less vehement while still expressing view.

[Phi for All]

If the minimum wage is increased, then companies that do not wish to pay the minimum wage will move their workforce overseas.

But this has been happening for many years now, and unemployment has fluctuated but remains at an acceptable level. And some service industries can't be affected by offshoring because they need a labor force in situ.

Hell, right now companies that don't even pay any minimum wage positions are moving their workforces overseas where they don't have to pay anything remotely close to a fair wage.

Fair wage is relative. Taking advantage of differing market and economic values is called arbitrage and has been a staple of business since the first trader said, "Buy low, sell high!".

As a result, the number of jobs available here in the US will drop off and unemployment will go upwards. This will be just as much of a problem as the poverty level is right now.

Except this has not been the case. Remember the big sucking sound Ross Perot kept telling us we would hear after NAFTA? It never happened the way he said it would.

If minimum wage is moved upwards, then any goods and services which rely on minimum wage positions will move up in price also. Groceries will cost more, food will cost more, commerce will cost more. As this cost goes up, then the raises in minimum wage that were given will still not be enough to cover the rising cost of goods and services.

Well... yes, you're absolutely right.

 

It's a difficult thing to balance. Do you want 15% of your population below the poverty line and another 5% unemployed, or do you want 10% below the poverty line but another 10% unemployed?

Education is the key. We can't afford to have such a poor learning system if we want to show the world what a democratic free market society is all about.

[Phi for All]

So if we forgot to make murder legal, then killing people would be in compliance with the law. Hell, we forgot to make slavery illegal, and people went and traded slaves shamelessly.

ecoli is going to punch you in the shoulder for me for this strawman. Really, really hard. This is not about murder and slavery, and you can't blame people for complying with laws you don't happen to like.

It always figures away? Something will change? How can you affirm this at all? We talk about this mysterious hand of the market like it actually exists. It obviously doesn't considering the current situation we're in. Although, maybe this "hand of the market" works in "mysterious ways" that us as mortals would not understand.

Look around you. Poverty has always been around, and our market economy is doing very well. Despite the loss of offshored jobs, despite the low education scores, and despite the minimum wage not being changed since 1997.

 

While I don't think an inflationary adjustment in the minimum wage would be a bad thing, I think jumping to $10 an hour would. And once you do it, you can never go back.

[doG]

Perhaps. Would $5 big macs really make much of a difference though. First I think you overestimate the amount of the economy that is tied up in the sub $10 wage range. Second the labor market already causes this phenom and it makes companies more efficient. Third higher cost of labor causes capital investment that becomes cheaper as more similar companies invest in the same way and economies of scale make said investments cheaper? Forth sub $10 jobs are subsidized with tax credits' date=' free health care, welfare, WIC and many more government programs.

Fifth many in the people with these jobs are trying to pay for education or other investments in themselves to get a better job.

Why are you so concerned about the fast food industry? I hardly think making a fast food managers job easier is an argument for not raising the minimum wage.What? Hire illegals and pay them a subminimum wage.

 

The middle class is what fuels the American economy. Increasing the minimum wage give people more opportunities for education, makes families more stable, reduces crime and if good for the economy. Personally I find the argument that fast food is more important than a living wage a bit disgusting

.[/quote']

Yes, it would make a difference, $5 Big Macs would still cost the $10 an hour worker as much as a $3 Big Mac costs a $6 worker now, 1/2 and hour's pay. By increasing the minimum wage you do not help the class of people that are currently making that wage because the cost of goods remains the same proportionately for that class. What you do end up with is a bump in the unemployment of that class as their employers try to adjust their new costs with the price of their products. It's not just the fast food industry but that industry makes a good example of the class. The effect is the same throughout those industries that are traditionally minimum wage jobs. Even the lowly stock clerk at the grocery store will see Big Mas still costing 1/2 an hours wage. In short, increasing the cost of labor to produce a product will result in an increase of that product's price. It doesn't matter if it's fast food, groceries or the guy changing oil.

 

BTW, can you point out any legislation anywhere that indicates that minimum wage is supposed to be a living wage?

[doG]

Well there has to be a minimum wage somewhere...

No, workers should be free to negotiate the price they will work for.